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A/R funding is at times referred as invoice financing. This kind of funding provides an ideal solution for firms in need of finances that may be not available from the traditional lenders. Majority of the companies require additional cash flows aimed at supporting seasonal demands, growth, business opportunities or solve any short-term cash requirement. Flexibility and prompt cash for your business is assured through accounts receivable financing.
It is because of the many beneficial reasons that A/R financing has been steadily gaining popularity. The advantages that are posed by this kind of funding are way too good to resist. This method improves the financial profile and credit rating of your company. The various benefits brought by accounts receivable are as follows:
Quicker cash flow. This mode of financing provides you with immediate opportunity of converting credit sales into immediate cash flow for the business. Through receiving outstanding receivables monetized by commercial funding company, you get into a position where you can obtain money whenever you are badly in need of it. This save you the time you would spend waiting for weeks and months for your client to pay you your dues.
More focus in put on the business. Acquiring an easy working capital saves your resources and consequently giving you comfort. You now get into a comfortable position where you can redirect all your energies on different business activities, like sales and marketing, capable of providing much profit. That time that one would have spent collecting payments from defaulting clients is now devoted to bolstering your business.
More user friendly. A/R financing can be applied to any kind of firm, large, medium and small. Setting up lines on accounts receivable factoring takes only a couple of days. Unlike conventional bank loans, making payments or creating a debt will not be required. In addition, one is free to finance as little or as more as he or she wishes.
Additional services offered. Majority of the financing firms offer to help in the management of your whole accounts receivables portfolio, which comprise of reporting, invoice processing and posting. Consequently, you get more time to focus on revenue-generating activities. In most cases, the factoring firm aids you in determining the credit rating of a potential client before you make actual sales to them.
The firm checks on the payment history of a potential client before it signs him up. By doing so, you reduce the prospect of a bad debt by a significant margin, and you start dealing with clients who have a reputable track records. Instances of getting into a financial crisis such as bankruptcy are eliminated.
It is because of the many beneficial reasons that A/R financing has been steadily gaining popularity. The advantages that are posed by this kind of funding are way too good to resist. This method improves the financial profile and credit rating of your company. The various benefits brought by accounts receivable are as follows:
Quicker cash flow. This mode of financing provides you with immediate opportunity of converting credit sales into immediate cash flow for the business. Through receiving outstanding receivables monetized by commercial funding company, you get into a position where you can obtain money whenever you are badly in need of it. This save you the time you would spend waiting for weeks and months for your client to pay you your dues.
More focus in put on the business. Acquiring an easy working capital saves your resources and consequently giving you comfort. You now get into a comfortable position where you can redirect all your energies on different business activities, like sales and marketing, capable of providing much profit. That time that one would have spent collecting payments from defaulting clients is now devoted to bolstering your business.
More user friendly. A/R financing can be applied to any kind of firm, large, medium and small. Setting up lines on accounts receivable factoring takes only a couple of days. Unlike conventional bank loans, making payments or creating a debt will not be required. In addition, one is free to finance as little or as more as he or she wishes.
Additional services offered. Majority of the financing firms offer to help in the management of your whole accounts receivables portfolio, which comprise of reporting, invoice processing and posting. Consequently, you get more time to focus on revenue-generating activities. In most cases, the factoring firm aids you in determining the credit rating of a potential client before you make actual sales to them.
The firm checks on the payment history of a potential client before it signs him up. By doing so, you reduce the prospect of a bad debt by a significant margin, and you start dealing with clients who have a reputable track records. Instances of getting into a financial crisis such as bankruptcy are eliminated.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Business Invoice Factoring he recommends you check out www.receivablefactoring.net.
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